Madoff Unloaded Jewels on Family: Attorney

By Larry Neumeister

NEW YORK -- Disgraced financier Bernard Madoff and his wife sent at least 16 watches, a jade necklace and a diamond bracelet to family and relatives, proving he will continue to dissipate what little is left from his $50 billion fraud, a prosecutor told a judge in arguing that Madoff be jailed.

Assistant U.S. Attorney Marc Litt said in a letter released Wednesday that Madoff violated a court order barring him from dissipating, concealing or disposing of any assets when he and his wife sent the items to close relatives and two friends.

"The need for detention in this case is clear," Litt wrote in a letter to Magistrate Judge Ronald L. Ellis. "The continued release of the defendant presents a danger to the community of additional harm and further obstruction of justice."

Madoff was arrested Dec. 11 on a securities fraud charge after the FBI said he confessed to swindling investors. Authorities say he told his sons he ran a $50 billion Ponzi scheme and had only a few hundred million dollars left.

Although he has been freed on $10 million bail, he has been confined to his $7 million Manhattan penthouse with an electronic bracelet and 24-hour guard.

During a bail hearing Monday, Ellis asked Litt and defense lawyer Ira Sorkin to file documents explaining their positions after Litt said Madoff should lose his freedom. Sorkin's filing was due later Wednesday.

"Our comments will be contained in our filing with the court," Sorkin said.